Looking at the Past and Present of NFT from "CryptoPunk #7523"

NFT is non-fungible token is known as non-fungible token, which has the characteristics of non-divisible, non-interchangeable, and unique. The corresponding concept to NTF is “Fungible Token (FT) )", that is, tokens that can be interchangeable for each other and are essentially indistinguishable, such as BTC and ETH. The difference between the two tokens is similar to Picasso’s paintings and the U.S. dollar. The paintings are "NFT" and the U.S. dollar is the "common currency." Each Picasso painting is different and has a different collection value. While U.S. dollar can interchange with each other, even though each dollar has a different number. Learn more about NFT magice box on gate.io.

On June 10, in the NFT art exhibition and online auction event "Natively Digital" held by Sotheby's, "CryptoPunk #7523" was sold for 11.754 million US dollars, setting a record for t CryptoPunk NFT historical transaction record and making NFT ,once again, the most trendy topic around the world.

"CryptoPunk #7523"-Image is extract from Internet

Yet, "CryptoPunk #7523" is still not the most expensive NFT in the world. On February 26 this year, "Everydays: The First 5000 Days”, created by the famous artist Mike "Beeple" Winkelmann, was sold at Christie’s auction house for $69.3 million. It is the most expensive NFT sold so far and also the one of the most expensive artworks ever.

"Everydays: The First 5000 Days”-Image is extract from Internet

In 2020, after the NFT has formed its own ecosystem, it has embraced it first round of popularity as DeFi gone viral around the global. In 2021, NFT continues to explore the diversity in integration scenarios. NFT has gradually integrate with traditional art, finance, entertainment media and many other markets. The diversity of its asset forms and application scenarios make NFT ecosystem continue to expand.

To many people, NFT is like the magic bean and is grown into a forest overnight. Regarding the history of NFT formation, this article will reference and quote Andrew Steinwold's "A Brief History of NFT" to sort out the origin and development of NFT.

1993 — Predecessor: Crypto Trading Cards

The predecessor of NFT can be traced back to 1993, when Hal Finney shared an interesting concept with the Cypherpunks team on CompuServe-Crypto Trading Cards.

Image is extract from Internet

2012-Birth of NFT : Colored Coin

In 2012, the first NFT-like token, Colored Coin, was born. Colored Coin is composed of small units of bitcoins, with the smallest unit being one satoshi. It can represent multiple assets and have multiple uses, including property, coupons, and issuance of company shares.

Colored Coin represents a huge leap in Bitcoin use, but it also have its drawbacks. Colored Coin can only represent some value when everyone agrees with their value. But this does not prevent Colored Coin from showing the feasibility and development potential of the real asset chain, laying the foundation for the development of NFT.

2014-Point-to-Point Financial Platform: The Birth of Counterparty

In 2014, Robert Dermody, Adam Krellenstein and Evan Wagner founded Counterparty: a point-to-point financial platform, and established a distributed open source Internet protocol on the Bitcoin blockchain. Counterparty supports asset creation and has a decentralized exchange, XCP contract currency and many projects and assets, including card games and Meme transactions.

2015 — On-chain Release: Spells of Genesis

Spells of Genesis game developers used the Counterparty platform to issue game assets on the chain, and funded the game development by issuing BitCrystals tokens, which can be used as exchange currency within the game.

Image is extract from Internet

2016—Explore and Try: Force of Will

In August 2016, Counterparty cooperated with Force of Will, the fourth-selling card game in North America, to issue cards on the Counterparty platform. Force of Will is a large mainstream company with no previous blockchain and cryptocurrency experience. This cooperation shows mainstream game company's interest in the digitization of game assets and this action is a symbolic exploration and attempt.

2016 — Asset issuance: Counterparty Rare Pepes

In October 2016, Rare Pepes was issued as an asset on the Counterparty platform. Rare Pepes is a meme with frog characteristics. These memes have a huge fan base and a meme exchange called Rare Pepe Meme Directory has been established.

Image is extract from Internet

2017-Ethereum Rare Pepes

At the beginning of 2017, Ethereum rose strongly, and Meme transactions began to appear on Ethereum. In March 2017, Peperium, a decentralized meme market and trading card game (TCG) project, enabled anyone to create memes that are permanently stored on IPFS and Ethereum. Peperium's associated with the token RARE can be used to create memes and pay for the listing of works.

2017-NFT project: CryptoPunks

In the NFT project CryptoPunks, created by two innovative technology experts, John Watkinson and Matt Hall, the characters are native to Ethereum and the total amount is capped at 10,000. As long as users have an Ethereum wallet, anyone can claim CryptoPunk virtual characters for free. Because the ERC721 standard was not established at that time, CryptoPunks did not follow the ERC721 standard. Due to this limitation, its virtual characters are not entirely ERC721. Therefore, the technical standard for CryptoPunks to construct virtual characters can be described as a mixture of ERC721 and ERC20.

2017-Going mainstream: CryptoKitties

CryptoKitties is a blockchain virtual game launched by Axiom Zen located in Vancouver, which allows players to adopt, feed, and trade virtual cats. The rise of CryptoKitties coincided with the bull market in 2017. Driven by the enthusiasm of CryptoKitties fans, the price of some virtual cats madly rose to 100,000 U.S. dollars, causing the public noticed the potential and power of non-homogeneous tokens.

Image is extract from Internet

Subsequently, Axiom Zen separated to Dapper Labs. Dapper Labs received approximately US$15 million in financing from top investors such as A16z and Google Ventures.

2018 to 2020-NFT Early Stage Ecosystem

From 2018 to 2020, the size of the NFT market has increased by 825%, the number of active addresses has increased by 201%, buyers have increased by 144%, and sellers have increased by 113%. Although compared with other cryptocurrency markets, the trading volume of the NFT market is small, but the development trend is significant, and the early ecological scale of the NFT has begun to take shape.

In 2020, Dapper Labs released the Layer 1 public chain Flow built with games and other digital assets as the target market to enhance the integrity of the NFT ecological infrastructure. In the same year, NBA TOP Shot, an NFT digital collectible based on Flow, was launched only half a year ago, with a transaction volume of over 42 million US dollars.

2021-NFT Spreads Rapidly, Broadened Issuance and Transaction Channels

In January 2021, VIV3, an NFT trading platform based on Flow, was officially launched. Artists, game studios, etc. can use VIV3 and Flow technology to mint NFT tokens, and sell assets to fans, collectors, game players and digital asset investors . OpenSea, SuperRare, and other top trading platforms' NFT work issuance and trading channels have been expanded in many ways, and NFTs have quickly emerged as the heated trend.

The Future of NFT- Its Potential

From Cryptokittens to NBA Top Shot, from emoji pack Nyan Cat to "Everydays: The First 5000 Days", and then to "CryptoPunk #7523", which created a single CryptoPunk NFT. NFT is like a group of sparks, gradually becoming a prairie fire. . It has only been a short span of 5 years and BFT went from mainstream to becoming a popular trend today. During this period, NFT has been integrated in multiple fields, from the game field to the art field, from the fashion field to the e-commerce field, and from the traditional industry. In emerging industries, people's pursuit and love for NFT has never stopped.

Looking back on the past May, despite the "5·19" incident, the hot spots for NFT out of the circle have never stopped. For example: On May 27th, Gucci displayed its first NFT artwork and will be auctioned at Christie’s. On May 27th, Huanren Chen released the second NFT "The XXXX I through the NFT platform Treasureland. 77 records are sold out within one minute. The total price is about US$190,000. On May 21, China Guardian first auctioned the NFT artwork "Peony Pavilion Rêve’s Dielianhua—Information Technology Penetrates "I"", which was sold for 667,000 RMB. On May 20th, Taobao Ali 520 Auction Festival launched the NFT digital art special and so on. It is foreseeable that NFT will release unlimited potential and value in a in the future.

Source: “The History of Non-Fungible Tokens (NFTs)”

Reference: "Overview of NFT Development in the First Quarter: Technical Solutions, Infrastructure and Application Tracks"

Author: Gate.io Researcher Hannah.H

*This article only represents the views of observers and does not constituted as any investment advice.

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